CANADA STOCKS-TSX near 2-week low as it looks beyond Obama's win

Reuters Staff

4 Min Read

* TSX down 131.92 points, or 1.1 pct, at 12,229.28
* All 10 sectors lower, led by energy shares
By Claire Sibonney
TORONTO, Nov 7 (Reuters) - Canada's main stock index skidded
to a near two-week low on Wednesday as investors turned their
focus from Barack Obama's win in the U.S. presidential election
to the "fiscal cliff" that now confronts the world's largest
economy.
Emboldened by a resounding election victory, Obama
immediately pledged to reach across America's political divide
to seek deals to resolve stubborn issues that dogged his first
term.
But the Toronto market was skeptical that Obama and Congress
would find a quick resolution on the fiscal cliff - a mix of tax
increases and spending cuts due to extract some $600 billion
from the economy at the end of the year barring a deal - and all
of the main index's 10 sectors were in negative territory. The
retreat was led by energy shares, off 2.1 percent, as oil prices
fell.
Suncor Energy dropped 3.1 percent to C$33.53,
Canadian Natural Resources lost 3.3 percent to C$29.22,
and Cenovus Energy was down 2.4 percent at C$33.76.
"Temporarily you're going to see weakening demand for
commodities. And that's being reflected in the market today,"
said Michael Sprung, president at Sprung Investment Management.
"(U.S. political gridlock) is not good for the Canadian
market. Though I believe eventually the U.S. is going to approve
the Keystone pipeline, having the Democrats in power may (push
it) further in the future."
At 11:12 a.m. (1512 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 131.92 points, or 1.1
percent, at 12,229.28. Earlier, it hit its weakest level since
Oct. 25 but was still holding up better than Wall Street, down
more than 2 percent.
"The market is worrying about 'Will there be any change in
the stubbornness displayed by both sides?'" said Gavin Graham,
president at Graham Investment Strategy. "Because if there isn't
then you could see the major driver of the North American and
indeed the world economy ... shutting down government in less
than two months."
The problems that dogged Obama in his first term, which cast
a long shadow over his 2008 campaign message of hope and change,
still confront him. He must tackle the government's $1 trillion
annual deficit, rein in the $16 trillion national debt, overhaul
expensive social programs and deal with the split Congress.
Weighing on broader sentiment, European Central Bank
President Mario Draghi underscored the weakness in Europe's
economy. Some Canadian earnings reports also
dampened sentiment.
One of the heaviest decliners on the index was fertilizer
producer Agrium Inc, down nearly 10 percent to C$96.00,
after it reported lower quarterly profit due to downtime at its
potash mine and dragged-out contract talks with China and India.
Bombardier dropped 4.4 percent to C$3.45 after it
said it would delay by about six months the first flight of its
C-Series jetliner because of issues related to suppliers, and
that it would cut about 1,200 jobs in its train manufacturing
division.
Enbridge was down 0.7 percent to C$39.81. Canada's
second-largest pipeline company reported a third-quarter profit
as losses on financial derivatives fell and it carried more oil
and natural gas on some of its pipelines.
WestJet Airlines slipped 0.3 percent to C$17.91
despite reporting an 80 percent rise in third-quarter profit as
it flew more passengers.